Use, sales taxes could benefit streets

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By Paul Hackbarth

The Rolla Daily News - Rolla, MO

By Paul Hackbarth

Posted May. 3, 2013 at 7:00 AM

By Paul Hackbarth
Posted May. 3, 2013 at 7:00 AM

NEWBURG

Finding ways to pay for Newburg street improvements is a tough job, according to Newburg aldermen, but Phelps County Commissioners Tuesday night offered city officials suggestions for raising revenue, but some of them involved the three-letter-T-word: tax.

The crowd at the April 30 county commission meeting held at Newburg City Hall was the biggest so far of the meetings held on Tuesday evenings for County Government Month, according to attendees. More than 35 people attended.

During the meeting, several Newburg area residents asked the commission for help, including Newburg Alderwoman Alyson Garvey, who asked for assistance with what she called “disintegrating” streets that “we can’t even repair.”

During Newburg Mayor James Poucher’s presentation of the commission meeting, he noted that being a small town, “we are constrained by what we get” in terms of revenue streams. “We need to find money to take care of our roads that are degrading.”

District Two Commissioner Gary Hicks said Newburg should support the one-cent sales tax being discussed in the state Legislature that could help boost funding for transportation in Missouri.

Lawmakers would need to pass legislation allowing voters to decide on the temporary tax measure by approving a proposed state constitutional amendment.

The proposal being discussed calls for 10 percent of the revenue raised by the statewide sales tax to be distributed to cities and counties on a 50/50 basis. Also over the 10-year-period that the sales tax would be in effect, an additional $396 million would be distributed to cities based on city population.

It is estimated that a total of $790 million would be distributed to cities and counties in Missouri and the money is specifically earmarked for transportation infrastructure.

“It’ll be more than you (Newburg) have now,” Hicks said, adding that Garvey and the other aldermen should encourage their residents to vote in favor of the issue, if or when it comes to that point.

Hicks also told aldermen to be on the lookout for “the promise of business to come in.” Hicks said when he served on the Rolla City Council, “we were always fighting for investors.”

District One Commissioner Larry Stratman provided two other recommendations that Newburg city officials should consider: a local use tax and the Marketplace Fairness Act, which is co-sponsored by U.S. Sen. Roy Blunt, of Missouri.

Under current law, residents of states with sales and use tax must pay tax on their online purchases, but retailers, including catalog and online sellers, only need to collect sales and use tax for states where they have a physical presence.

The Marketplace Fairness Act would compel online and catalog retailers, often referred to as “remote sellers,” no matter where they are located, to collect sales tax at the time of a transaction like local retailers are already required to do. If the act passes in Congress, states would be given the authority to do so after they have simplified their sales tax laws.

Page 2 of 2 - Stratman said local “mom and pop” shops are at a disadvantage compared to Internet sellers under current law.

The use tax is imposed on purchases made by Missouri residents from out-of-state vendors.

The state currently imposes a use tax of 4.225 percent. While counties and cities can also impose their own local use taxes, a vote of the people in those counties or municipalities is required.

Neither Phelps County nor any incorporated city in the county imposes a local use tax. Neighboring Maries County does, however, and local use tax there is distributed back to Maries County.

County Clerk Carol Bennett said the use tax is being collected in Phelps County, but it goes to the state. “We’re just not getting our share,” she said.

“Not every tax is a bad tax,” Stratman said.

“If you have a tax, make it fair,” said Presiding Commissioner Randy Verkamp.

For a solution to fix streets in Newburg that does not involve taxes, Verkamp said the county could offer assistance when the City of Newburg seeks bids for asphalt. Using community service was another option, Verkamp said.